For pretty much all of my life, I was taught the same basic script – study hard in school, get good grades, and get a good job. It’s something that pretty much all of us were taught to do from a young age.
There’s nothing wrong with this script, and indeed, it’s the same advice I’ll likely give to my own kids one day. We obviously need good jobs if we want to make significant financial progress. And these good jobs typically come from having a good education. Even if that wasn’t the case, I’d still be pushing hard for more education, as I think education is beneficial beyond just the monetary benefits it can provide.
But what I’ve started to think about as I’ve gotten older is why we pressure ourselves to get all of this done as soon as possible. When we’re kids, it often seems like we’re told that we can do anything we want. But once we head off into the real world, things change and we’re told that we need to be practical and get our sh*t together. And importantly, we need to get our sh*t together sooner, rather than later.
This whole pressure to get all of our ducks in a row as soon as possible leads to an interesting approach to life. We’re taught to think about our jobs and careers conservatively, playing it safe at times when we can and probably should be thinking much more aggressively. It’s like we forget just how long our lives are and how much time we have to ride the ups and downs of life.
Thinking About Asset Allocation And Risk
I quit my job a few months ago, and since then, I’ve had a lot of time to think about jobs and careers and how we end up where we are. What I’ve been thinking about lately is why the advice we give to young people about investing isn’t applied in the same way to our jobs and careers.
Here’s what I mean. Most financial experts will tell you that a young investor should invest heavily in equities – in other words, with a more aggressive asset allocation compared to an older investor. This advice makes sense because of how much time young investors have to ride the ups and downs of the market. When you’re young, you have the benefit of time – decades and decades of time – such that any market loss really doesn’t matter.
When it comes to jobs and careers though, the general mindset seems to be completely different. Rather than encouraging people to be aggressive, most people will seemingly tell you to do the opposite. Play it safe, find a good job in a steady field, and for lack of a better word, hold on for dear life.
It’s this general mindset that led me to law school in the first place. I was 22-years old – a new graduate with basically no idea what I wanted to do with my life. Even though I had decades of life left to live, I kept telling myself that I needed to get things done now because if I didn’t, I’d end up being a bum with no future. Law school provided me with a seemingly safe career path, something that I could start now and do for the next three or four decades of my life.
In retrospect, I probably should have recognized just how young I was, slowed things down a bit, and maybe taken some chances or at least given myself the time to really analyze and look at the choices in front of me, rather than just jumping into what I thought was the safe thing to do. I definitely wasn’t running out of time – not as a 20-something anyway.
But my whole life had taught me that I needed to play it safe. Even as I struggled through five years as a practicing attorney, I kept telling myself that I just needed to stick it out. Being a lawyer was a responsible and safe thing for me to do.
Hold on for dear life. That’s what I was doing.
Why Don’t We Apply This Same Risk Framework To Jobs And Careers?
So why are we taught to be conservative when it comes to jobs and careers, even though we’re told to be aggressive in other areas of life? I have a few ideas:
We Think In Worst-Case Scenarios. You can go 100% in equities because, assuming you’re investing correctly, you’re likely never going to lose it all. When it comes to work and careers, however, we tend to think in worst-case scenarios. We seem to think that one wrong turn will end our lives.
The truth is, the worst-case scenario probably isn’t going to happen to most of us. When I made the decision to quit my job and go all-in on my blog, my big fear was that this whole thing was going to fail and I’d end up homeless and destitute. But realistically, would that really happen? Most likely not, and realistically, the worst-case scenario would probably be that I just have to go back and get a job.
Work and life are so much more complicated than the worst-case scenarios we can imagine. Even a totally failed decision probably isn’t going to be the end of your life. The world is just too big for that to happen. And if a decision somehow does ruin you, the beauty is you’ve still got time on your hands to get yourself back on your feet.
We Don’t Think We Can Make It Doing Something Else. I think as the world gets more specialized, a lot of us will start to suffer identity crises. We make decisions when we’re teenagers, then tie ourselves to those decisions for the rest of our lives.
I made the decision to be a lawyer when I was 22-years old, based on nothing really other than that I was good at taking standardized tests and I didn’t take any science classes so I couldn’t apply to medical school.
This single decision made me think that being a lawyer was something I was supposed to do for the rest of my life. That’s kind of crazy when you think about it.
Most of us probably have the skills to do different things. We just need to get over that initial hump of thinking we can’t do it and that we’re tied to the thing we picked out years ago.
We Worry About What Others Think. This is something I’m very guilty of. My whole life, I’ve done things, really not for me, but for other people. Even now, I struggle with this. It’s hard to go from saying I was a lawyer to saying I’m…I don’t even know what I am now.
Living our lives based on what others think probably isn’t the best way to live life. If you’re going to do anything outside of the norm, whether that’s chasing financial independence or chasing something else, you’re going to get criticized for it too.
Don’t Be Afraid To Take Risk Early On
I’m 32-years old, and even at this age, I still feel super young. In the grand scheme of things, I’m still a baby with decades of life left to continue working and get myself back on track if this whole quarter-life crisis thing doesn’t work out.
Of course, comparing the way we approach investing when we’re young and the way we approach our jobs and careers isn’t exactly an apples to apples comparison. We obviously all need money now in order to live, whereas the money we invest isn’t necessarily money we need.
At the same time though, I think there’s something we can think about here. Life is long and most of us, even those of us chasing financial independence, will still have a long time to work.
On the investing front, we take on more risk because we have the benefit of time on our side. That same fact applies to jobs and careers. Many of us have time on our side. We just need to remember that when we think about the risks we want to take.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the sharing economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the sharing economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps Kevin uses to track his financial accounts.
- SoFi Money. A really good checking account with absolutely no fees. It also reimburses all ATM fees worldwide. Even better, you'll get a $25 welcome bonus if you open an account and fund it with at least $500.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Dobot. This is a great microsaving app that monitors the cash flow in your bank account and saves away small amounts for you each week. It's free and you'll get $5 when you use it.
- Credit Karma. A free credit monitoring app that everyone should use. It'll notify you of any changes to your credit report and is the best credit monitoring app out there.
Feel free to send Kevin a message here.
FP, I’m too thrilled that you are making it real. Time for you to start YouTubing bro!
https://youtu.be/px317izkJ6w
This link will catapult your potential reach!
Thanks for sharing,
SW
I loved this post. Really interesting thought.
What stands out to me is just how outdated the 40 year working career is becoming. Back in the day, lifetimes of factory work was the norm for most. Weekends and retirement weren’t even a thing. Then the boomer generation made long white collar careers and pensions the new norm.
Now pensions are mostly gone, and early retirees and people like yourself chasing “unusual” careers are showing that the high school career decision isn’t a lifelong contract anymore. We’ve got more options than ever to support ourselves.
Thanks Money Wiz! Exactly right. Our world is just way too different compared to the world our parents lived in. It’s just way too big of a world with too many options.
FP – very deep and thoughtful take. Career risks take different forms. I worked 37 yrs for one employer. I took key risks in bringing new ideas that brought rewards where others chose to be safe just keeping their heads down. I took risks in career assignments – paths taken or not taken, some fruitful and some not. By contrast, my older son is with his 3rd employer in 6 yrs. The 1st jump was for opportunity, the second for non-work reasons to a much smaller firm in a different field. The last jump is his favorite for job satisfaction, growth and location. My son doesn’t think he’ll get as far in his career as me but he may go further taking calculated career risks earlier (learning no choice is fatal and to give more weight to non-work considerations for overall life satisfaction). Each generation has a unique set of choices and challenges (think for a moment what young adults in the Great Depression faced). As a parent, help kids learn to think for themselves in early small choices and experience/discuss/learn from the consequences of those choices, so they can better navigate the world as an adult.
Thanks for the advice! It sounds like one thing you’ve done is to avoid instilling fear in your kids, and instead letting them figure things out for themselves. I know that for a lot of people, fear is often the default choice, as we’re often told our whole lives to be careful of X or don’t do Y or generally to be cautious. I really like what you said – no choice is fatal. Your son can try things and even if they don’t work out, he still has a lot of life ahead of him.
MY wife and I quit our jobs, sold everything, and took off to travel the world full time. Next week will be a year and it’s not working out financially so we’re going back to work in the states around January. It’s tough getting income while you’re already overseas and I recommend getting your income sorted before you make the leap. Good thing we’ve got bank interest and dividend income.
I’m glad you took that leap. And it’s a good example here of the fact that even if things don’t work out, we can still recover.
spot on sir – to get out of ones comfort zone is paramount.
Yep! Gotta take chances when you can because it you don’t, you never had a shot.
Thanks for this article — it’s very inspirational! I completely agree with you too. I’m now 40 and wish I had thought about charting my own way and pursuing other career interests earlier in life (rather than just playing it safe). It’s never too late to start, but it does get harder later in life.
That’s right. But even at 40, you’ve still got decades left. Don’t forget that!
Thanks again for this. Ever since I stumbled upon your website I have been inspired. As someone who would have loved to be in your position by becoming a lawyer before 25, I realize that I shouldn’t long for it because that would mean I would be a different person and I wouldn’t have experienced what I have done so far in my life. It is also because of this website that I was able to take a step into the gig economy world. I’m not ashamed and have realized that the gig economy is just another way to gain income and become closer to financial independence. Thank you, Kevin and your leap into going all-in on this blog is also another sign of encouragement to not be afraid of pursuing the unclear and the risky.
Thanks Henry! I’m glad that I was able to help you in some way!
I have the (apparent) advantage of knowing what I want to do early in life. My parents are both commerce graduates—and I plan to do the same! Also, there is a good book should read to help you overcome your fear of criticism. It’s called Think And Grow Rich. I’ll email you with further details!
Thanks Jasper! I haven’t read Think and Grow Rich yet. I know it’s an old book that a lot of people talk about, so I’ll add it to my reading list.
In entrepreneurial circles, failing fast and the embrace of mistakes is part of the culture. In some careers, there’s more “forgiveness” of slower career paths where you could meander in your 20’s and still get back in. But for some careers, such as management consulting, investment banking (front office roles) and Fortune 100 management training programs, even plum roles at the FANG companies and other big tech, these careers start right out of school — arguably in school b/c internships are so important. Many of these Type A careers are perceived as the holy grail of careers, and that is where a lot of the pressure comes from — at least that’s what I have seen as a recruiter and career coach for 20+ years.
When you think about it, isn’t it kind of nuts that we have these careers where you have to decide to do these while you are still a teenager and still basically a child? It’s like Harry Potter sorting people into their lives with the sorting hat. It just seems nuts to me.
I have mixed thoughts about this. For the most part, I agree with you. However, I also think there’s this idea in today’s culture that you should just completely ignore what makes money and follow your passion. While this can work out, perhaps I’m just too risk-averse for that!
While I think we should all follow our passions, my thinking aligns more closely with the concept of Ikigai (the confluence of what you love, what you’re good at, what the world needs, and what you can get paid for), which takes other factors like earning potential into account. I think it makes sense to work on what will propel you towards FIRE, and explore passions along the way so that you don’t end up passing up opportunity and investing too heavily in something you end up not enjoying as much as you thought you would.
Mrs. Wallet and I are currently splitting the difference. I have a very conservative career in the corporate world where I’m paid well, and I’m pretty happy there. Mrs. Wallet was really unhappy in that environment, though, so she’s pivoting to exploring more entrepreneurial endeavors and possibly picking up a fun part-time job to fill the gap. We’re both also building other side businesses that are more passion-based and will be our focus in FIRE, like our joint yoga business. If those build up enough steam, we may jump ship as you have.
Either way, it’s exciting to hear about your successful pivot out of a traditional career, and I’m looking forward to following your progress and learning along the way!